The Mystery of Operations
For many business owners, Operations is the “black-hole of business”. Your Operations is the cog in the machine that is your business as a whole, it keeps your business moving forward, but you're not exactly sure of the why's or how's this happens. This is a common viewpoint of Operations because much of what happens operationally, happens behind the scenes.
Operations is not necessarily client-facing, but the results of the work executed are absolutely client-facing. Because of this veil, many business owners put off establishing their operational foundation. It isn’t until their business is already in motion and growing, that “all of a sudden” the lack of standard operating procedures comes back to bite them in the keister. The volume of core business functions that reside under the operational scope dwarf that of any other branch of business. It is the cog that runs the machine, the gas that fuels the car, the people that bring dreams and goals to fruition.
From the highest level, Operations converts labor and/or materials into services and goods, at the highest possible level of efficiency possible, while targeting a needle-threading operating margin to maximize net profit. Each repetition of this high-level view organically provides continuous improvement, and thereby, growth. For, with each repetition, comes a new definition of “the highest level of efficiency possible”. Operations is delivery-focused, ensuring the successful conversion of inputs to outputs.
Depending on your particular industry, Operations may have a different look. For example, Operations in the manufacturing industry will have a strong focus on supply chain management, whereas in the service industry it will focus more on technological and logistic solutions. Regardless of your industry, Operations’ responsibility is to provide consistent structured solutions. For some real-world applications, let’s look at a few examples of Operations across different industries.
If you’re in the manufacturing or distribution industry, your view of Operations embodies the origin of this term, as Operations began to emerge from volume manufacturing in the industrial revolution of the late 1800s. Your view of Operations will have a strong focus on supply chain management; procurement, facility management, manufacturing and/or distribution. Additional focuses could include quality, inventory, safety, and compliance. Operations will share cross-procedural responsibilities with Sales, Marketing, and Customer Service by supporting initiatives and providing logistical support.
If you’re in the retail industry, your view of Operations will focus more on store operations; labor, security, facility management, customer service, inventory management, and product display. Additional focuses may include receiving, quality, safety, and cleanliness. Operations may share cross-procedural responsibilities with Human Resources and Marketing by supporting training and hiring efforts, and providing logistical support.
If you’re in the service industry, your view of Operations will have a strong focus on logistics; event planning and coordination, technological solutions, vendor management, and people management. Additional focuses may include event facilitation, supplier management or project management. Operations will most likely share cross-procedural responsibilities company-wide, as your product is the time and expertise of the people, and Operations likely owns people management.
As long as you understand the core function of Operations - converting inputs to outputs - you can apply it to any industry. Operating Management systems, such as Lean, have disciplines in both manufacturing and development. The core of Operations remains the same, only the view changes. The most important thing to keep in mind with Operations is that it is responsible for delivering efficient output. Without Operations, your business will become a destructive pile of ideas (input), with no tangible application (output), that will lead to it’s inevitable end.
Now that you know what Operations does, and how it can affect your business, let’s touch on how to best support this branch of your organization. When your expectations are clear, your Operations will thrive. By providing a foundation for your Operations, you will empower the initiation of continuous improvement. With improvement, comes growth.
You can take action today to insure the integrity of your Operations, by establishing your business foundation.
Have a vetted organizational chart
Create detailed job descriptions for each role
Document and refine all standard operating procedures
Establish a company budget with operating margins
Once your foundation is established, and Operations is actively practicing continuous improvement, the only thing required to sustain that success is communication. If Operations is aware of impending variables, the foundation can be accurately adjusted to account for them. You’ll be pretty amazed by what can be pulled off with a little structure, and consistent communication.
When you’re ready to take the next step, we’re here for you.
